Chinese electronics giant Luxshare has acquired a 50.1 percent majority stake in Leoni, a German manufacturer of cable and wiring systems.
As part of the deal, Luxshare’s subsidiary, Time Interconnect Singapore, will also take over Leoni’s Automotive Cable Solutions (ACS) division, Leoni said in a press release.
The total purchase price amounts to €320 million ($357 million) for the ACS business and an additional €205 million ($229 million) for the controlling stake in Leoni.
Following the transaction, ACS will operate as an independent manufacturer of automotive cables, maintaining its focus on the automotive sector.
The transaction is still subject to approval by antitrust authorities. The agreement was signed between the Luxshare Group and Austrian entrepreneur Stefan Pierer, the previous sole owner of Leoni.
The collaboration is designed to create a global platform, combining Leoni’s relationships in Europe and North America with Luxshare’s foothold in China, with the aim of unlocking new market opportunities.
Luxshare is known for its expertise in connectors and electronics and will help Leoni provide more integrated solutions for wiring systems.
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In the statement, company CEO Grace Wang called the deal "a pivotal step in our journey towards becoming a global leader in the automotive sector."
Leoni’s experience in producing wiring systems for the automotive industry could help Luxshare diversify its product portfolio and strengthen its production capabilities.
“By combining our strengths, we will not only expand our global footprint,” Wang said.
Leoni currently operates primarily in Eastern Europe, North Africa, and America, while Luxshare’s production base is concentrated in China and Vietnam.
Leoni’s financial stabilization
For Leoni, the partnership represents a vital step in its financial recovery, accelerating the progress the company has made over the past year in stabilizing its finances, a key priority after struggling with significant debt and falling sales as the war in Ukraine impacted production.
Leoni’s financial struggles became particularly pronounced at the end of 2022 when a planned sale of its cable division collapsed.
The company, heavily indebted (to the tune of more than ($762 million) was forced into pre-insolvency restructuring proceedings under Germany’s Corporate Stabilization and Restructuring Act (StaRUG).
During the restructuring, Stefan Pierer emerged as the sole owner of Leoni. The Luxshare deal provides a much-needed lifeline, offering Leoni financial backing and strategic support.
